Omnichannel Merchants Shift Closer to the Consumer

As the world economy reels from the current COVID-19 coronavirus pandemic, industries are feeling the effects. For many companies and even entire industries, the pandemic has resulted in closures and work stoppages. But for others, business is more intense than ever before. The latter is certainly the case for the global shipping industry, including UPS, FedEx, and DHL, which have all announced temporary peak surcharges related to the coronavirus.

If your business utilizes any or all of these global carriers, it’s important to understand what these operational changes related to temporary peak surcharges mean. In some cases, you may need to adjust your own fees or promised shipping times to accommodate these changes.

Below, we’ll outline the temporary peak surcharges as well as any other significant operational changes being made by the big three: UPS, FedEx, and DHL.

Note the information below is accurate as of publishing time, but all three companies have reserved the right to adjust their temporary peak surcharges as the situation develops.

UPS Temporary Peak Surcharges

Effective April 5, 2020, UPS has instituted temporary peak surcharges on shipments originating in China Mainland and Hong Kong SAR and terminating in North America and Europe. Surcharges apply to these shipping categories and sub-categories:

UPS Worldwide Express

UPS Worldwide Express Freight

UPS Worldwide Expedited

Temporary peak surcharge rates are as follows. For Worldwide Express (including Express Plus and Express Saver), the surcharge is $0.34 per pound. For Worldwide Expedited, it’s $.029 per pound. And for Worldwide Express Freight (including Midday), the temporary peak surcharge is $1.13 per pound of freight.

All these rates are effective April 5, 2020, until further notice.

One additional change worthy of note: UPS has instituted a suspension of the UPS Service Guarantee due to the Coronavirus. This suspension applies to all shipments everywhere, including domestic US shipments.

FedEx Temporary Peak Surcharges

FedEx has also instituted temporary peak surcharges, but theirs work more or less in reverse of the ones issued by UPS. As of February 14, 2020, FedEx instituted a temporary surcharge on most International Priority Freight and International Economy Freight shipments originating in the US or Puerto Rico and terminating in China. Here are the rate details:

30 Yuan per kilogram

A minimum surcharge of 2,200 Yuan per shipment

FedEx notes these fees can be waived by your sales representative if you’re shipping “medical and epidemic prevention supplies or aid.”

In addition to the temporary peak surcharge on US/Puerto Rico shipments to China, FedEx has implemented numerous other service changes. Their money-back guarantee is currently suspended globally for these service classes:

FedEx Express

FedEx Ground

FedEx Freight

FedEx Office

Signature requirements have also been suspended for the health and safety of delivery staff and customers alike.

In addition, FedEx has instituted a wide range of global temporary service suspensions and transit time extensions thanks to the challenges created by COVID-19 (excepting shipments for relief efforts, of course.) The most notable:

No shipments to Mongolia, Tonga, French Polynesia, Vanuatu, Wallis and Futuna, and American Samoa

No freight shipments to the Philippines

No shipments from American Samoa, Mongolia, Tonga, Vanuatu, and Wallis and Futuna

Transit time delays to and from most countries in Asia

The full list of specific shipping suspensions and delays is quite detailed and is available here.

DHL Temporary Peak Surcharges

DHL’s approach to the stresses of the COVID-19 coronavirus pandemic echoes those of the above two companies. Effective April 1, 2020, DHL is instituting what it calls an Emergency Situation Surcharge on all Time Definite International (TDI) shipments (with exceptions — see below). The surcharge applies to all relevant shipments regardless of origin or destination.

In a departure from the approach taken by the above two companies, DHL is not charging a per-pound or per-kilogram rate. DHL has opted for a five-tiered fixed charge rate schedule. Rates are as follows.

2.5 kg or less: no surcharge added

2.51 – 30 kg: € 2.50

30.1 – 70 kg: € 15

70.1 – 300 kg: € 50

Greater than 300.1 kg: € 200

Again, these surcharges apply to any shipments in the Time Definite International category. At this time, DHL is not applying temporary peak surcharges to Day Definite International (DDI – road) or Time Definite Domestic shipments, life science and healthcare customers, or shipments designated DHL Medical Express.

Like FedEx, DHL is experiencing service disruptions and delays in certain locations, but it declines to publish a list online. DHL’s customers are advised to contact either their account manager or a customer service representative to verify DHL’s real-time operational details in a given country.

How to Navigate These Challenges

The global shipping industry is operating at peak capacity and simultaneously grappling with the effects of a pandemic: reduced staffing numbers, border closings, and unusual patterns of shipping activity, just to name a few. The information above is a helpful place to start, but it’s far from a comprehensive shipping strategy for your business.

In times like these, you need a partner in the logistics space on whom you can count – one who has the capacity to stay abreast of the ever-changing adjustments caused by COVID-19 and can make actionable recommendations on how to cost-effectively ship parcels while maintaining on-time delivery rates. Ready to find that partner? Talk to a Logistyx expert today.

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